Altcoins experienced a relief bounce on May 13 as the initial panic triggered by Bitcoin’s sell-off, Terra’s UST crash, and multiple stablecoins losing their dollar peg begin to subside and crypto-loving traders risk seek to obtain assets that trade at annual lows.
Cryptocurrency market daily performance. Source: Coin360
Despite the significant correction that occurred over the past week, Bitcoin (BTC) bulls managed to fight their way back to the $30,000 zone, a level that was defended several times during the 2021 bull market.
Here is a look at what various analysts have to say about Bitcoin’s prospects moving forward as the price attempts to recover in the face of multiple headwinds.
Is a short squeeze pending?
Cryptocurrency analytics platform provided insight into the minds of derivatives traders Coinalizewhich evaluated long vs. short Bitcoin positions for BTC/USD perpetual contracts on ByBit.
1-day chart of BTC/USD perp vs. long/short BTC/USD account ratio. Source: Twitter
As shown in the bottom half of the chart above, interest in short positions, depicted in red, increased during the recent market decline, indicating that derivatives traders were expecting more short-term declines.
“Sentiment was very negative in recent days, as seen in ByBit’s long/short ratio and funding rate. Short contraction/bounce expected,” Coinalyze founder Gabriel Dodan told Cointelegraph in comments. private.
A short-term breakout to $35K is expected
Bitcoin’s crash to $26,716 on May 12 was notable because it broke below the May 2021 low of $28,600, “which was seen as the last man standing for BTC,” according to David Lifchitz, managing partner and director of ExoAlpha investments.
In Lifchitz’s view, the rebound seen on May 13 was to be expected as “a lot of bad news had been removed” while the “UST fiasco panic move already happened.”
Bitcoin sitting on May 2021 lows “looks like a good entry point here with a hard stop if the purge continues” according to Lifchitz, but traders shouldn’t expect a return to $60,000 overnight and instead , they should establish a more modest short term. target of $35,000.
“Length at $28.5K / Stop at $26.5K / Target Profit at $34.5K = $6K up / $2K down = 3/1 P/L ratio and from an investment standpoint, I find it convincing.”
Related: Buy the dip or wait for the ultimate pain? Analysts Debate Whether Bitcoin Price Has Bottomed
A V-shaped recovery is unlikely
Market analyst and pseudonymous Twitter user ‘Rekt Capital’ provided some insight into what it would take for Bitcoin to regain its bullish momentum, who aware the chart below notes that BTC “needs to hold $28,600 as price support to challenge $32,000,” while a “weekly close below the green would be bearish.”
BTC/USD 1-week chart. Source: Twitter
While many optimistic traders expect a quick recovery from this latest downturn, Rekt Capital warned that “by history’s standards, a strong V-shaped recovery to mark a generational bottom is less likely.”
the analyst saying,
“Many are expecting one as the previous March 2020 BTC bear market bottom was very volatile. But the macro price history suggests extended ranges are more likely.”
The total cryptocurrency market capitalization is now $1.287 trillion and the dominance rate of Bitcoin is 44.4%.
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This post Bitcoin Price Might Rebound to $35K, But Analysts Say They Don’t Expect a ‘V-Shaped Recovery’
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